Cloudonomics: The Business Value of Cloud Computing, + Website

Size Matters

Regardless of whether there are economies of scale in the cloud that translate into a unit cost advantage, size does matter. Think of it this way: If you are leading an army that is fighting hand to hand, it doesn’t matter whether you received a volume discount on the cost of the soldiers’ uniforms. And if you are trying to park a jumbo jet in a hangar, it doesn’t really matter whether the cost per brick is higher or lower than in smaller buildings; you need a minimum size to accomplish the task.

There are two scenarios that we will briefly touch on where size is key: the case of defense and the case of minimum requirements. The cloud can uniquely help with both.

In military operations, there are two general approaches to battle: attrition and relational maneuver. Attrition is a brute-force numerical contest, which may exist in several forms. Generally, the larger army beats the smaller one, although depending on the nature of the battle, various stochastic system dynamics may unfold.

In maneuver, subterfuge, indirection, and deception may be at play. Rather than victory merely being based on the logic of probability and proportionality, insights into the weak points of the enemy are relevant. As military strategist, historian, and author Edward Luttwak, a senior associate with the Center for Strategic and International Studies wrote, the point of maneuver is “to incapacitate by systemic disruption—whether the ’system’ is the command structure of the enemy’s forces, ...